You might’ve heard other people talk about getting “free trips” covered by credit card rewards. Their secret? Travel credit cards.
The right travel credit card can help you earn frequent flyer miles with your favorite airline, hotel points you can redeem for free nights or flexible travel rewards you can redeem for flights, hotels, car rentals, tours and more.
There are a dizzying number of travel credit cards available today, and almost as many loyalty and rewards programs. Try to research individual credit cards and their unique programs before you apply. To set you on the right track, here’s an overview of how travel points work and the different ways you can redeem them.
Best ways to use points and miles for travel
Travel credit cards come in many different forms. Some offer more lucrative rewards than others. The most common types of travel cards are:
- Airline credit cards: Co-branded airline credit cards from airlines like Delta and United let cardholders earn frequent flyer miles in their specific programs, and they can come with benefits like early boarding and free checked bags.
- Hotel credit cards: Hotel credit cards from brands like Marriott Bonvoy and World of Hyatt let members earn hotel loyalty points they can redeem for free nights and use to move through status tiers to gain extra amenities like early check-in or complimentary breakfast.
- Flat-rate travel credit cards: Some travel credit cards offer flat-rate points that can be redeemed for cover travel purchases charged to the card, usually at a rate of one cent per point.
- Flexible travel credit cards with transferable points: There are also travel credit cards that offer flexible points that can either be redeemed for travel through a portal or transferred to the brand’s airline and hotel partners. Cards with point transfer capabilities tend to be premium travel cards that charge an annual fee, but they often come with additional perks or annual statement credits to make it worthwhile.
While all types of travel cards have their merits, airline credit cards, hotel credit cards and flat-rate travel credit cards all have fairly limited redemption options.
For example, miles earned on a co-branded airline card are rarely good for anything other than flights with that specific airline and its partners or upgrades to a premium cabin. Hotel loyalty points are typically only redeemable for free hotel stays and some on-property benefits.
Unless you only fly with one airline or always stay with the same hotel, the best rewards value will likely come from flexible travel credit cards that let cardholders redeem their points in more ways than one.
Scoring a travel portal bonus
Some travel credit cards let you book travel with points at better rates than if you were to book directly with an airline or hotel. Examples include the Chase Sapphire Preferred® Card , Chase Sapphire Reserve® and the Ink Business Preferred® Credit Card from Chase.
When you have the Chase Sapphire Preferred or the Ink Business Preferred, you can book airfare, hotels, car rentals, tours and more through Chase Travel℠ for a 25% redemption bonus, bringing your per-point value to 1.25 cents per point. The Chase Sapphire Reserve® lets you book travel for a 50% bonus, bringing your per-point value to 1.5 cents per point.
Transferring points and miles
While travel portal bonuses offer a simple way to get some extra value from your points, transferring points to airline partners will often be the most worthwhile redemption path -- as long as you’re willing to do some legwork to find good deals. This is especially true if you plan to transfer points to a frequent flyer program for a premium cabin redemption, which can easily cost thousands of dollars if you paid for the fare in cash.
According to Bankrate, you’ll typically get around 2 cents per point in value on average with American Express Membership Rewards points, Capital One Miles or Chase Ultimate Rewards points.
Apart from potentially getting better value for your points, point transfers have another advantage over travel portal bookings: all your bookings are directly through the hotel or airline. This means if you need to change your reservation or if something goes wrong, you might have an easier time getting the issue fixed because there’s no third party (the travel portal) involved.
Note, however, that transfer partners vary across programs, so check to make sure the card you’re interested in offers transfers to travel brands you’d like to use before you apply.
How to redeem travel points
How you’ll redeem travel points depends on the exact credit card you have, as well as the redemption options available to you. Here are some of the ways you may be able to redeem travel points:
- Point transfers: The best rewards programs let you turn your travel points into airline miles or hotel loyalty points, which you can then use to book airfare, hotel stays or upgrades directly through the airline or hotel’s loyalty program.
- Statement credits on your account: Some travel credit cards let you charge travel purchases to your card then redeem points to cover those purchases at a fixed rate, usually one cent per point. However, some programs like American Express, will provide less than a cent for statement credits.
- Travel portal purchases: Chase has its own travel portal, just as you’ll find Capital One Travel for Capital One credit cards and Amex Travel for Amex cards. These portals let members book travel with points, cash or a combination of the two.
Note that point values may change depending on how they’re used. For example, you’ll get a better redemption rate for transfers to partners in many cases, but that’s not guaranteed. While different cards have different redemption options and rates, the least valuable travel rewards redemptions are typically for statement credits to purchases made to your card or for non-travel redemptions like gift cards or merchandise.
Benefits of using points for travel
The main benefit that comes with using points for travel is the potential for savings. After all, travel reward points let you lock in all or part of your airfare, hotels and more for a reduced cost, and that leaves room in your travel budget for other parts of your trip.
Travel reward points can also help you book travel that you otherwise might not have been able to afford. For example, it’s not uncommon for jetsetters to redeem airline miles for business and first-class flights that would normally cost upwards of $5,000. This lets rewards enthusiasts get a premium travel experience without paying out of pocket for the privilege.
Mistakes to avoid when using points and miles
When you’re trying to earn rewards for travel or looking for the best ways to redeem them, there are a few pitfalls to avoid. Here are some common mistakes when earning and using credit card points and miles:
- Carrying a credit card balance: If you’re carrying debt while pursuing travel rewards, you’re not doing yourself any favors. Credit card interest rates are sky high right now, with the average credit card APR sitting at over 20%. The extra money you’ll pay in interest will almost certainly outweigh any rewards you earn.
- Forgetting about taxes and fees: For airfare redemptions specifically, your points generally won’t fully cover the cost of a flight. That’s because airline taxes and fees (and sometimes fuel surcharges) are still your responsibility, and these costs can easily add up to hundreds of dollars for each “free flight” you book.
- Overspending to earn more rewards: If you’re spending more than you normally would to boost your travel points haul or earn a credit card welcome bonus, you can into any value you’d get from either. This is especially true if overspending causes you to carry credit card debt.
- Transferring points too early: Remember that all point transfers to airlines and hotels are one-way and permanent, so you should never transfer points to another program until you’re 100% certain you can use them. It can also help to wait for a good transfer value. Divide the dollar cost by the point cost to figure out what kind of per-point value you’re getting for your points.
- Trying to use travel rewards over the holidays: Reward availability is typically very limited or nonexistent during peak travel times, so you’ll likely be disappointed if you try to redeem rewards for holiday travel.
- Waiting until the last minute to redeem: You’ll have a better chance at booking the travel you want with points if you compare options early and book as soon as you find something worthwhile. If you wait until the last minute, you may find dwindling award availability, higher prices for awards, or both.
How much are my points worth?
Your rewards points can be worth different amounts depending on the program they’re in, but point values can also vary based on how you redeem them.
For example, according to Bankrate, Amex point values can be as high as 2 cents per point if you transfer to airline partners. However, you’ll only get 1 cent per point when redeeming for airfare through American Express Travel and 0.7 cent per point when redeeming for prepaid hotels, cruises and other travel through American Express. Statement credits with Amex will net you one of the lowest values. If you don’t feel like using point transfers, redeeming for airfare would be your best bet.
Most other flexible travel rewards programs let you get a minimum redemption rate of 1 cent per point for redeeming for past travel expenses, or booking travel through their respective portals, but you should check with your credit card issuer so you know for sure.
Determining redemption rates
It’s easy to determine the value of flat-rate redemption options, as issuers will usually make it clear on their websites or in the terms and conditions of their rewards programs. For example, Amex has a calculator showing the exact value you’ll get for your points through various redemption options.
Point transfers for travel partners typically give you a fixed transfer ratio -- typically 1 credit card point: 1 airline or hotel point -- but the actual cash value of your points can vary depending on the booking you make. You can find the value for a particular redemption by dividing the cash cost of a booking (minus taxes and fees) by the point cost to get a cent-per-point value.
For example, let’s say you find a flight you want that has a retail price of $400. If you can also book the flight with 20,000 airline miles and $6 in airline taxes and fees, your rewards value would be almost 2 cents each.
($400 – $6) / 20,000 = 1.97 cents per point
Several websites, like Bankrate and The Points Guy, have calculated unofficial average values for points of popular credit card and travel loyalty programs based on their own research. Before transferring your points and making a booking, it helps to take a look at those charts. If the cent per point value of a given rewards booking is less than the average, you may want to just pay cash and save your points for a more valuable booking.
Understanding blackout dates and restrictions
As you look for the best ways to use your points and miles, you’ll also want to keep blackout dates and restrictions in mind. This is especially true if you’re using points for flights or hotels directly with a frequent flyer program or hotel loyalty program. These programs will sometimes limit award availability and block out some travel dates altogether. Common blackout dates are on holidays such as Christmas or Mother’s Day or during other busy travel times.
However, there are some rewards programs that don’t have restrictions or blackout dates. For example, Southwest Rapid Rewards actively advertises that the program doesn’t limit award seats or feature blackout dates.
How are travel points calculated?
The way travel points are calculated depends on the travel credit card you have and its specific earning rates. For example, some travel credit cards like the Bank of America® Travel Rewards credit card* offer the same number of points on everything you buy, whereas other travel credit cards give you different amounts of points per dollar spent in categories like dining out, travel, gas and more.
In summary, how many points you’ll earn depends on your card’s earning rate, which categories you’re spending money in and how much you spend.
FAQs
The number of points you’ll need for an international flight can vary based on the airline and when you want to travel. Also note that most frequent flyer programs use dynamic pricing, so the amount of rewards you’ll need can fluctuate over time.
That said, it can be possible to find one-way economy flights overseas for as little as 25,000 or 30,000 miles, plus airline taxes and fees. But you’ll need to shop around to find the best deals.
Free flight awards vary dramatically across programs, but you could find a domestic flight award for as little as 7,500 miles in some cases.
Points for travel are rewards points you can earn with a travel credit card or through travel itself. For example, you can earn airline miles by making purchases with an airline credit card, but also by flying with the airline and completing other qualifying activities so long as you’re a member of their loyalty program.
*All information about the Bank of America Travel Rewards credit card has been collected independently by CNET and has not been reviewed by the issuer.
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